Iao Kun Group Holding Company Limited Announces Rolling Chip Turnover of US$0.25 Billion for July 2016

HONG KONG–(BUSINESS WIRE)–Iao Kun Group Holding Company Limited (“IKGH”) (NASDAQ:IKGH), which
operates through its subsidiaries and related promotion entities that
act as VIP room gaming promoters and a collaborator, today announced
unaudited Rolling Chip Turnover (as defined below) for the month of July
2016 at the company’s VIP rooms in Macau was US$0.25 billion, down 44%
year-over-year, compared to US$0.44 billion for the month of July 2015.
Win rate for the month of July 2016 was 3.20%.

For the first seven months of 2016, IKGH’s Rolling Chip Turnover was
US$2.30 billion (an average of $0.33 billion per month), down 47%
year-over-year, compared to US$4.36 billion (an average of $0.62 billion
per month) for the first seven months of 2015.

The Company’s VIP rooms are primarily focused on high stakes baccarat.
Baccarat accounts for approximately 88% of total Macau casino winnings
according to the Macau Gaming Inspection and Coordination Bureau (DICJ).
In Macau, two remuneration methods are used to compensate VIP room
gaming promoters. On a fixed commission basis, VIP room gaming promoter
revenues are based on an agreed percentage of Rolling Chip Turnover. On
a win/loss split basis, the VIP room gaming promoter receives an agreed
percentage of the “win” in the VIP gaming room (plus certain incentive
allowances), and is required to also bear the same percentage of losses
that might be incurred. Compared to the fixed commission basis, the
win/loss split basis subjects the VIP room gaming promoter to the risk
of losses from the gaming patron’s activity and to greater volatility.

All IKGH VIP rooms are on a revenue sharing remuneration model.

Definition of Rolling Chip Turnover

Rolling Chip Turnover is used by casinos to measure the volume of VIP
business transacted and represents the aggregate amount of
non-negotiable chips players purchased. Bets are wagered with
“non-negotiable chips” and winning bets are paid out by casinos in
so-called “cash” chips. “Non-negotiable chips” are specifically designed
for VIP players to allow casinos to calculate the commission payable to
VIP room gaming promoters. Commissions are paid based on the total
amount of “non-negotiable chips” purchased by each player. VIP room
gaming promoters therefore require the players to “roll,” from time to
time, their “cash chips” into “non-negotiable” chips for further betting
(hence the term “Rolling Chip Turnover”). Through the promoters,
“non-negotiable chips” can be converted back into cash at any time.
Betting using rolling chips, as opposed to using cash chips, is also
used by the DICJ to distinguish between VIP table revenue and mass
market table revenue.

All IKGH VIP rooms are on a revenue sharing remuneration model. On a
win/loss split basis, the VIP room gaming promoter receives an agreed
percentage of the “win” in the VIP gaming room (plus certain incentive
allowances), and is required to also bear the same percentage of losses
that might be incurred.

About Iao Kun Group Holding Company Limited

IKGH is a holding company which operates through its subsidiaries and
related promotion entities that act as VIP room gaming promoters and a
collaborator, and is entitled to receive all of the profits of the VIP
gaming promoters and a collaborator from VIP gaming rooms. IKGH’s VIP
room gaming promoters and collaborator currently participate in the
promotion of five major luxury VIP gaming facilities in Macau, China,
the largest gaming market in the world. One VIP gaming room is located
at the top-tier 5-star hotel, the StarWorld Hotel & Casino in
downtown Macau, and another is located in the luxury 5-star hotel, the
Galaxy Macau™ Resort in Cotai, each of which is operated by Galaxy
Casino, S.A. Additional VIP gaming rooms are located at the Sands Cotai
Central and City of Dreams Macau, both in Cotai, and Le Royal Arc
Casino, located in NAPE, Downtown Macau. IKGH recently started trial
operations to the Australian casinos (Crown Perth Casino in Perth,
Australia and the Crown Melbourne Casino in Melbourne, Australia) to
gain a greater understanding of the preferences of its junket agents and
VIP players and the logistics of the market.